Robinhood was one of the first commission free trading platforms in the world, not just on stocks, but also options and cryptocurrency. Causing competitors such as Fidelity, E-Trade and Charles Schwab to do the same. This, coupled with no minimum investment, Robinhood seem to be achieving their goal of making investing easy and accessible to everyone, with their target customer base being millenials and gen z users new to investing.
You may be wondering how Robinhood makes any money with $0 commission fee. The answer to this is through order flow payment. Robinhood receives orders from its client base, and then sells these orders to market makers for a small price. Due to the large amount of orders Robinhood receive, this accounts for a substantial amount of their revenue. Order flow payments increased 339.6% in the first quarter of financial year 2021, accounting for more and 80% of company revenue.
Key Statistics
- 340,000 users at inception, has now grown to 18 million
- 32969% increase in revenue 2015-2020
- Pre IPO, has been valued at US$20 billion
They are now looking to shake up wall street with an IPO on the 28th July. With a target valuation of US$35 billion, this is one of the most highly anticipated stock listings of the year.
Click here to learn more about trading US stocks
Click here to open a POEMS trading account
Disclaimer
This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827. This publication contains general securities advice. In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person. Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of a securities adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation. PhillipCapital and its associates within the meaning of the Corporations Act may hold securities in the companies referred to in this publication. PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any structure cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not be distributed to retail investors outside of Australia.